Tax Dollars Flow to Indicted Operator of Minnesota “Assisted Living” Homes
In a troubling development, a man indicted in a federal fraud case continues to receive substantial state funds for his operation of assisted living facilities in Minnesota. Gandi Mohamed, charged in 2024 related to the Feeding Our Future scandal, has reportedly remained financially supported through a network of businesses he runs with his wife. In 2023 alone, these facilities allegedly received over $2.3 million in public funds—part of a staggering $49 million from the state since 2016.
NewsNation’s Rich McHugh highlighted the discrepancies in a recent broadcast, stating, “These assisted living facilities received over $2.3M in state money last year alone.” He found one of the facilities indistinguishable from a typical suburban home, raising critical questions about the adequacy of oversight in such essential care services.
Public Money, Private Residences
McHugh described a facility he visited that bore no visible markers of a licensed assisted living center. This included a single mailbox and a lack of signs indicating medical staff or institutional infrastructure. Such findings clash with the expectations for regulated care, spotlighting potential neglect of oversight in Minnesota’s health spending.
Mohamed’s entities are legally registered to provide a suite of assisted living services encompassing room and board, health monitoring, meals, and supervision. The state reimburses these services through Medicaid programs, which can exceed $6,000 per resident monthly, depending on their needs. However, the operation is contingent on proper licensing and quality care—conditions that are in question given the scant public information about staffing, resident numbers, and inspections since his indictment for separate alleged fraud.
Indicted in $250 Million Fraud Network
Mohamed’s legal troubles stem from his alleged involvement in a vast fraud case, significantly impacting Minnesota’s child nutrition funding. The Feeding Our Future scandal revolved around inflated meal counts and shell organizations, all manipulating pandemic-related federal funds intended to feed children.
Criminal charges announced by the U.S. Department of Justice implicated several individuals, including Mohamed, who allegedly funneled over $1 million from the program. Despite these serious allegations, state payments to his assisted living operations have continued uninterrupted, leading to urgent calls for a thorough examination of how Minnesota licenses and monitors its long-term care providers.
A Pattern of Oversight Failures
Data confirms Minnesota has nearly 3,000 licensed assisted living facilities, with Medicaid expenditures surpassing $4 billion in 2023 for long-term services and supports. Yet controlling inept operators remains a persistent issue. In Mohamed’s case, at least three facilities are registered under different LLCs at similar addresses, none of which exhibit signs of professional care operations. Nonetheless, the state continues to process payments based on service claims that lack substantial evidence of compliant operations.
This creates a loophole where a business operator can collect taxpayer money even after being indicted for fraud, revealing gaps between the agencies responsible for oversight. The Minnesota Department of Human Services and the Department of Health handle different aspects of long-term care—billing and licensing—but if one organization does not receive criminal compliance information from the other, an operator like Mohamed may continue to operate.
Political and Policy Implications
Calls for reform have grown stronger as this case highlights significant concerns about government contract oversight. Advocates for transparency argue that agencies should automatically flag operators under federal investigations and reassess ongoing contracts accordingly. In high-stakes programs reliant on public funding, it seems prudent to pause payments until allegations are resolved.
The implications extend to how state authorities handle oversight amid rising demand for assisted living services. Reports indicate that enforcement inspectors deal with substantial caseloads, hindering their ability to conduct regular site evaluations or monitor overlapping business ventures. The lack of comprehensive data analysis and communication between agencies complicates effective oversight.
Successful resolution of these issues will likely require significant structural changes, including integrated background checks across state agencies and a system to alert officials when criminal indictments occur. Without such measures, trust in the integrity of taxpayer-funded services wanes.
The troubling reality that a person facing serious accusations can still receive payments for caring for vulnerable populations raises critical questions. McHugh framed the issue directly: “How do you go from being indicted—for laundering money meant to feed kids—to still getting paid to house and care for the elderly?”
No comprehensive public comment has been issued by the state regarding Mohamed’s continued contracts. Requests for information from both the Department of Health and the Department of Human Services remain pending.
Families with loved ones in assisted living and taxpayers funding these operations are left wondering if the current systems can adequately prevent repeat incidents of fraud and failure.
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